Sensex surges 400 points to hit one-week high as metals, financials rally

Domestic equity markets after opening marginally higher, extended gains to hit an over one-week high on Wednesday, lifted by strength in metals and financials, while foreign investors turning net buyers of domestic shares also helped the sentiment.

The Nifty 50 index was up 113 points or 0.61% at 18,163.90 as of 11:42 a.m. while the S&P BSE Sensex rose 0.51% to 60,964.81.

Metal stocks in domestic trading advanced as much as 1.3%, benefitting from China's flurry of policies, rolled out to assist homebuyers and property developers and relieve a long-running liquidity squeeze in the industry.

Heavyweight HDFC Bank led the climb on the Nifty 50, rising 1.7% to extend gains from the previous session after it reported an 18.5% jump in third-quarter profit over the weekend.

It was the first major domestic bank to report results and set the stage for a robust quarterly performance from banks.

Meanwhile, foreign institutional investors snapped their 17-day sales run, the longest streak in six months, purchasing 2.11 billion rupees ($25.85 million) worth of equities on a net basis on Tuesday. They had sold shares worth 246.51 billion rupees ($3.02 billion) since Dec. 23.

Expert View
“India’s current underperformance is likely to be temporary since India has the best growth and earnings prospects among large economies. However, concerns of a global slowdown this year and the possibility of FIIs again turning sellers at higher levels will cap the upside to the market in the near-term,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

“From now on Budget expectations also are likely to influence the market trend. IT stocks which have bounced back after the good Q3 results and high-quality banking and capital goods stocks along with RIL have the strength to support the market,” Vijayakumar added.

For the last four trading sessions, Nifty has been hitting higher highs and higher lows, which is a sign of accumulation, said Deepak Jasani, Head of Retail Research at HDFC Securities said. "In the current up move, Nifty could find resistance at 18141-18265 band. On falls, 17926-17972 band could provide support," he added.

Global Markets
US stocks ended mostly lower on Tuesday, with the Dow Jones Industrial Average snapping a four-day win streak after Goldman Sachs reported poor earnings results.

The Dow Jones Industrial Average fell 392 points, or 1.14%, to 33,910.85 and the S&P 500 lost 8 points, or 0.20%, to 3,991. The Nasdaq Composite added 16 points, or 0.14%, to 11,095.

Asian shares were mixed on Wednesday while Japanese yields hugged a policy cap, with markets anxiously awaiting a pivotal Bank of Japan (BOJ) meeting that could see the world's third-largest economy shift away from decades of ultra-low interest rates.

In early Wednesday trade, Japan's Nikkei share index gained 0.6%. China's blue chips rose 0.2%, while Hong Kong's Hang Seng Index was 0.2% lower.

Currency Watch
The Indian rupee fell by 11 paise to 81.80 against the US dollar in early trade.

The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, increased by 0.42% to 102.82 level.

Crude Price
Oil prices rose on Wednesday, extending the previous session's gains, driven by optimism that a relaxation of China's strict COVID-19 curbs will lead to a recovery in fuel demand in the world's top oil importer.

Brent crude futures were up 0.6%, at $86.44 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 0.7%, to $80.73 a barrel.

(With inputs from agencies)

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